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Far from ignoring growth, Piketty is obsessed with it. He worries about demographic stagnation, and he worries about productivity. When societies don’t grow, inherited wealth looms large. The societies right now in which it looms largest are geriatric Japan and Italy. Slow-growing societies become rentier societies. Rentier is the word Piketty uses in the original French to mean, neutrally, “living off rent.” But it implies disapproval, too, and it gives off an extra air of decadence and corruption in English, much as “cowboy” turns into a special kind of slur when it passes into French.

Piketty’s belief in the inevitability of certain capitalist processes is one sense in which he resembles Karl Marx. Extreme inequality is inherent to capitalism, in his view, not a product of corruption or chance. Noting that Mario Draghi, head of the European Central Bank, hopes to save the eurozone by promising to “fight against rents,” Piketty writes:

The fact that capital yields income . . . has absolutely nothing to do with the problem of imperfect competition or monopoly. If capital plays a useful role in the process of production, it is natural that it should be paid. . . . Rent is not an imperfection in the market: it is rather the consequence of a “pure and perfect” market for capital.

Piketty’s objection to Draghi sounds in places more entrepreneurial than Marxist.

More by Christopher Caldwell

Yes, his data undermine the Panglossian position that capitalism is a perfectly self-correcting system, but this position is a straw man. A good proxy for the number of people who actually believe this would be the 1,275,951 people, or just under 1 percent, who voted for former New Mexico governor Gary Johnson, Libertarian candidate for president in 2012. But there is something more interesting about Piketty’s arguments. They are as devastating to those who hail the bookas to those who deplore it. In particular, Piketty questions the idea that mid-twentieth-century welfare measures, such as the New Deal, worked to trammel capitalism at all.

Krugman, in an otherwise glowing review in the New York Review of Books, accuses Piketty of an “intellectual sleight of hand.” Krugman wants more on America’s elites. “The main reason there has been a hankering for a book like this,” Krugman writes, “is the rise, not just of the one percent, but specifically of the American one percent. Yet that rise, it turns out, has happened for reasons that lie beyond the scope of Piketty’s grand thesis.” There is actually plenty on America’s elites in Piketty’s book, but Krugman is otherwise right—what Piketty has to say about them doesn’t have much to do with the model the book lays out.

For Krugman, the hinge-year of American inequality is 1980, when Ronald Reagan was elected. “Since 1980 the one percent has seen its income share surge again,” Krugman writes. The Federal Reserve has seen “a dramatic shift in the process of US economic growth, one that started around 1980. . . . After 1980 . . . the lion’s share of gains went to the top end.” Piketty is not so wowed by 1980. For him, the only break from the perennial depredations of capital comes in a period that shows up on a graph as a U-shaped trough, starting in about 1910 and lasting about a half-century. The ratio of capital to output falls dramatically—from its usual 7 to about 2 or 3 in Europe, and from its usual 5 to about 3 or 4 in the United States. We are now returning to pre-World War I ratios, but this has been a slow process, one that began sometime between 1950 and 1970, according to Piketty’s charts.

It would be easy to read Piketty’s work as a blueprint for a future leftism—but not as a vindication of historic liberalism. “It was indeed the two world wars that wiped the slate clean in the twentieth century,” he writes. It is hard to draw any lessons from them for our own time. There has never been a successful program to tame capitalism, at least no program one would dare to replicate. Consider inflation. It is an innovation of the twentieth century, Piketty shows. In the novels of Balzac and Jane Austen, the yield on land is so steady (5 percent) that it need not even be mentioned. To have an estate worth a million francs is to have a yearly income of 50,000. “The two measuring scales were used interchangeably,” he writes, “as if rent and capital were synonymous, or perfect equivalents in two different languages.”